SpaceX IPO Targets $1.77 Trillion Valuation

SpaceX is planning to debut on the Nasdaq next week with a valuation of $1.77 trillion.

Elon Musk’s firm could become the seventh-largest company in the United States by market cap—bigger than Tesla Motors—on June 12 as it plans to market its initial public offering (IPO) at a fixed price of $135 per share, according to a June 3 filing with the Securities and Exchange Commission (SEC).

The filing indicates SpaceX aims to sell 555,555,555 shares, equaling about $75 billion. The banks underwriting the deal can purchase an additional 83.33 million shares at the IPO price, bringing the total from fundraising to almost $86 billion.

Musk will still control more than 82 percent of the voting power following the sale, though he must hold onto all his shares for one year.

The filing noted that SpaceX will use the net proceeds to “fund our growth strategy, including the expansion of our AI compute infrastructure, enhancements to our launch infrastructure and launch vehicles, increases in the scale and capacity of our satellite constellations.” It will also use some of the cash to repay debt on a $20 billion bridge loan.

It does not intend to declare any cash dividends for shareholders for the foreseeable future.

Starlink, the satellite-based internet service provider, has been a major contributor to its valuation, accounting for a significant share of its revenues. But going public also reflects Musk’s aim to develop reusable rockets for space travel and the colonization of Mars.

One justification for the trillion-dollar valuation is the new industries that will merge, the company said in its SEC filing.

“We believe that our current space efforts will catalyze transformative breakthroughs that could reshape terrestrial industries and lead to the emergence of new trillion-dollar markets on the Moon, Mars, and beyond,” it said.

Goldman Sachs is the lead banker, followed by Bank of America, Citigroup, JPMorgan Chase, and Morgan Stanley.

Retail Participation

SpaceX, founded by Musk in 2002, launched an IPO website for retail investors on June 4. A prospectus, Q&A, and roadshow presentation were published on spacexipo.com.

Retail traders can obtain price exposure to a private company like SpaceX that is about to go public.

Coinbase, the cryptocurrency exchange, followed Binance’s lead by launching a SpaceX Pre-IPO Perp for non-U.S. users. This is a perpetual futures contract that allows traders to speculate on the value of a private firm without owning shares.

“Pre-IPO perps are great to get exposure to private companies before they go public (outside the U.S. only for now) and to help with price discovery,” Brian Armstrong, CEO of Coinbase, said in an X post.

The platform plans to build a pipeline of perps.

Fidelity also said on June 4 that the SpaceX IPO would be available to its clients with as little as $2,000 in a retail brokerage account.

What the Analysts Say

The company is main-eventing this year’s IPO frenzy—artificial intelligence (AI) giants Anthropic and OpenAI will be the other big attractions—but market watchers have mixed views on SpaceX.

While SpaceX is a future-focused company that has endless opportunities, it might also experience a ride to the stars that “may be too turbulent for some,” says Thomas Shipp, head of equity research at LPL Financial.

“We are intrigued by what SpaceX may accomplish in terms of extending humanity’s reach into the cosmos, but an ambitious mission on its own does not necessarily make for a sound company, and there are a lot of hopes and dreams baked into the business plan,” Shipp said in a note emailed to The Epoch Times.

Dhierin-Perkash Bechai, market analyst and head of investment group The Aerospace Forum, presented a “Buy” rating in a May 26 research note.

Although he would have preferred a “pure-play space company” rather than a “vertically integrated space-AI company,” Bechai said he likes Starlink and SpaceX’s launch services.

“I do like Starlink, even though we note that this is increasingly going to become a more contested area, looking at the expansion of other space-based connectivity providers, and I also do like the launch services. It would make a buy rating almost a no-brainer,” he wrote.

Still, there are caveats, meaning some investors might want to wait before buying directly into the IPO, Bechai added.

Whatever happens, according to Shipp, SpaceX’s success will be tied to Elon Musk.

“SpaceX is very much tied to the success of Elon Musk, as he is the chief executive officer (CEO), chief technical officer (CTO), and chairman of the board. Musk has complete control of the company,” he said.

The company agreed that Musk’s reduction of his ownership interest would “adversely affect” SpaceX.